LAKE ELSINORE: Commercial development still happening in Lake Elsinore

LAKE ELSINORE -- Stater Bros. is forging ahead in building a
supermarket in Canyon Hills, which given the state of the economy,
may prompt many to ask, "Why?"

Yet, in the view of Jack H. Brown, the question should be, "Why
not?"

"We have no reluctance in putting this brand-new supermarket and
significant investment in the Lake Elsinore area," said Brown, the
company's chairman and chief executive officer.

He said the company, the largest grocery chain in Riverside and
San Bernardino counties, does extensive research before opening any
new store.

"My job is filling stomachs and when I choose a store location,
it's about how many stomachs are around there that need feeding,"
he said.

So, while few developers are moving forward with plans to build
in an economic climate in which the bottom appears to have fallen
out, Stater Bros. went through the city's bureaucratic hoops in
getting the appropriate approvals. In late December, the company
pulled a permit valued at $2.6 million, the amount that city
officials estimate the property will be worth for tax purposes.

To get an idea of how bad things have gotten countywide, the
value of nonresidential permits, including commercial and
industrial development, that were granted throughout Riverside
County in 2008 was $2.6 billion, compared with $6.5 billion in
2006, a 60 percent drop, according to figures released earlier this
month by the Construction Industry Research Board.

Yet, as evidenced by the construction launched on Stater Bros.
last week and other businesses that have opened or are in the
pipeline, development hasn't come to a complete standstill in Lake
Elsinore.

Temecula-based Mission Oaks Bank opened a branch recently.
Another grocery chain, Fresh & Easy Neighborhood Markets, is
planning to open a store near the relatively new Alberhill
subdivision on the city's north side.

Precision Plastics has expressed interest in building a plant on
property it owns in an industrial area along Corydon Street. The
city is eagerly awaiting progress on developing a marina
accompanied by various retailers at the lake, a plan to develop the
land around The Diamond stadium and the creation of a master plan
in hopes of revitalizing downtown.

Cautious optimism

City officials view the activity with cautious optimism, while
acknowledging the economy, dragged down by a plummeting housing
market and unemployment which is nearing 10 percent in the region,
has taken its toll.

A home improvement store, the Do It Center, left town a while
back and Mayhall Printing shut down recently after being in
business for five decades on Main Street, where there remain
several empty storefronts.

The recession has led to a slump in retail sales, though not to
the extent felt in the construction industry. As a result of the
throttled buying, the city, which gets a 1 percent cut of total
taxable sales, is experiencing a decline in sales tax revenue. In
2007, the city reaped $8 million compared with $7.5 million in
2008, a 6.2 percent decline, according to city officials.

"I think all sectors have slowed down," said Lake Elsinore's
acting community development director, Tom Weiner. "I'd be lying to
say the influx of structures now is at the same pace it was at 24
months ago. But there is certainly a good pace that's keeping us
busy and, more importantly, keeping development going and adding to
the city's tax base, which is very important."

Planning Commission Chairman Axel Zanelli said development has
slowed, but not stopped.

"Things are still turning," he said. "People are still working
on getting entitlements for projects. Lake Elsinore is still one of
the areas that has a lot of land available to develop. In the long
term, we'll be fine. It's not going to happen overnight."

Bill Blankenship, deputy director of the Riverside County
Building Industry Association, said that, while some projects
continue to go forward in Lake Elsinore and elsewhere, there is not
much to cheer about considering the depth to which the housing
market has sagged. The residential market is what he and economists
view as the engine that drives this region's prosperity.

Only 3,817 permits were issued countywide to build single-family
homes in 2008 -- 16,875 fewer than in 2006, according to the
Construction Industry Research Board.

"I can assume 'businesses' have seen enough rooftops in those
areas (of Lake Elsinore) to make them want to come there and do
business," he said. "I think they also can look at the future and
see that those rooftops will be there," he said. "But does that
mean there is a mini-boom? I don't think so. By and large,
commercial and industrial development is completely slowing
down."

Welcome mat for a market

Brown, the head of Stater Bros. for the last 28 years, said the
slowdown is nothing he hasn't seen before.

The 72-year-old company opened its first store in Lake Elsinore
31 years ago. The 44,956-square-foot market it is building in the
Canyon Hills Market Place at Railroad Canyon Road and Canyon Hills
Road will be its third in the city. The company now has 165
supermarkets, including stores in San Diego, Orange, Los Angeles
and Kern counties.

"I've seen the smokestacks silenced in the Midwest because of
the economic conditions," Brown said. "That's why in this economic
climate we're in, there's no better place in the world to be than
in Southern California and particularly in the Lake Elsinore and
Inland Empire area. People still want to move out of Orange County
and Los Angeles where the real estate prices are high into areas
that are still affordable."

According to people interviewed at the shopping center, the
store, which will employ about 150 people, can't open soon
enough.

"It's a good thing," said Sabrina Dadalt, 35, a Canyon Hills
resident and mother of two. "We're looking forward to it, because
it's a pain to drive 4 1/2 miles down to Vons or another couple of
miles to the other Stater Bros. The people who live here all know
about it. We've been waiting for it."

Murrieta resident Teresa Cecena, 22, a hair stylist in the
center, said she would use the market once it opens and it will
fill a niche the neighborhood lacks.

"I think it's a great idea, because it will bring in more
customers and it will be good for the people who live around here
because they won't have to go as far to get groceries," Cecena
said.

Despite the seemingly daily reports of burgeoning unemployment,
shriveling consumer spending and ongoing foreclosures, Lake
Elsinore Mayor Bob Magee remains upbeat. He believes the city is on
the verge of a rebound as evidenced by the new businesses and
developments on the horizon.

"Investment is continuing in our community and I feel extremely
optimistic about where we're going in 2009," he said. "We've had no
bank failures in the city and to the best of my knowledge, we've
had no major employers close. … There's a tremendous amount of
confidence in our community. Our buying power is strong."